Scania profits impress

Swedish truck and bus producer Scania has reported fourth quarter pretax profits of 2.6 billion kronor, up 19 percent from a year earlier and ahead of analysts forecasts of 2.5 billion.

Sales were slightly weaker-than-expected at 19.007 billion kronor, versus analysts forecasts of 19.711 billion.

Scania’s fourth quarter order bookings rose 44 pct to 25.4 billion kronor. It said order bookings in Jan remain at the same high level as in the fourth quarter.

The company said it expects demand for heavy trucks to remain strong in Europe throughout 2007, adding that its production rate will be raised to an annual rate of 80,000 vehicles from the end of the first quarter. This is an increase of 25 percent from its production rate a year earlier.

Looking ahead the company said it sees sales growth of 10 percent a year.

“Increased transport needs and a shortage of transport capacity are leading to higher demand for vehicles and services in nearly all markets where Scania operates,” it said.

“In coming years we expect sales to increase by about 10 percent annually, with a sustained operating margin of 12-15 percent”.

The company said proposals for its regular dividend and capital restructuring will be discussed at its next board meeting on Feb 8th.

Scania said it incurred costs of 250 million kronor in the fourth quarter related

to concentration of production and MAN’s offer for Scania.

“Costs related to MAN’s offer for Scania affected earnings by about 200 million skr,” said Scania. It said adverse currency effects also hit its results

by 715 million skr.

Fourth quarter operating margin amounted to 13.6 percent, up from 11.8 percent.

Among the company’s markets, full year truck sales to Russia leapt 106 percent to 2.8 billion kronor, and by 46 percent in the Netherlands to 3.2 billion kronor. In

Germany they rose 8 percent.

However in Britain 2006 sales were largely flat at 5.8 billion kronor, while in Brazil they were down 3 percent, and in France down 12 percent.

Scania said the total market for heavy trucks in western Europe rose by 4.0 percent during 2006 and amounted to 261,000 units.

Within Europe the company said Central and Eastern Europe is growing in importance for it and now accounts for around 15 percent of its truck deliveries.

AFX/The Local


Volkswagen gets shares to take over Scania

Volkswagen, Europe's biggest carmaker, was set to take full control of Swedish truck manufacturer Scania on Tuesday after a small but crucial shareholder agreed to sell its shares.

Volkswagen gets shares to take over Scania
Swedish pension fund Alecta previously held out for a higher share price but agreed to sell its 2.04-percent stake in Scania, paving the way for Volkswagen to acquire full control the company.
On April 30, the German car giant said it lacked less than two percent more shares to reach its 90 percent goal, and thereby force the sale of the remaining shares.
"After new discussions with Volkswagen we have concluded that there will be no increase in their offer," Alecta said in a statement, referring to Volkswagen's refusal to pay more than 200 kronor ($30.5) per share.
In February, Volkswagen offered €6.7 billion ($9.3 billion) to acquire the nearly 40 percent of Scania it did not already own and to strengthen its position against its German competitors Daimler and the Swedish truck maker Volvo.
Scania's board of directors recommended shareholders not to part with shares at the price offered.
The offer expired on April 25th. However, confident that shareholders could be won over, Volkswagen extended its offer to May 16.
The German auto giant already owns truck and bus-maker MAN and bought into Scania in 2000.
It had previously said that it could make annual savings of €650 million through economies of scale by taking full control of the Swedish company.
The takeover is just the latest to hit Sweden's beleaguered vehicle manufacturing sector which has seen Chinese takeovers of the once iconic car brands Saab and Volvo.
Volvo Trucks announced more than 4,000 job cuts over the last six months and a voluntary redundancy scheme aimed to cut costs and increase profitability.